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Economic Aspects of Wind Power Generation in Developing Countries

Gerrit van Kooten and Linda Wong

No 2009-05, Working Papers from University of Victoria, Department of Economics, Resource Economics and Policy Analysis Research Group

Abstract: Power interruptions are a typical characteristic of national grids in developing countries.Manufacturing, processing, refrigeration and other facilities that require a dependable supply of power, and might be considered a small grid within the larger national grid,employ diesel generators for backup. In this study, we develop a stochastic simulation model of a very small grid connected to an unreliable national grid to show that the introduction of wind generated power can, despite its intermittency, reduce costs significantly. For a small grid with a peak load of 2.85 MW and diesel generating capacity of 3.75 MW provided by two diesel generators, the savings from using wind energy (based on wind data for Mekelle, Ethiopia) can amount to over a million dollars per month. While the savings from deployment of wind turbines are enormous, the variability of wind prevents elimination of the smaller diesel unit, although this unit operates less frequently than in the absence of wind power.

Keywords: wind energy and development; stochastic simulation of electricity grids; economic savings from wind power (search for similar items in EconPapers)
JEL-codes: Q42 (search for similar items in EconPapers)
Pages: 19 pages
Date: 2009-09
New Economics Papers: this item is included in nep-ene
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